Home Sales Rise "BUT" This represents a 2.3% decrease in sales versus a year ago.

ARLINGTON, Va.—Existing home sales rose 7% in September to a seasonally adjusted annual rate of 6.29 million units.

This represents a 2.3% decrease in sales versus a year ago.

NAFCU's Curt Long noted “existing home sales rose on the month to the highest level since January."

"Housing starts fell 1.6% on the month while permits are down 7.7%, but the pipeline of construction is still full with backlogs near a 15-year high," said Long, NAFCU's chief economist and vice president of research. "Until they can catch up, home-builders will limit their sales as they battle labor and material shortages."

Sales rose in all four regions this month. The South saw the largest rise, gaining 8.6% on the month, followed by the West (+6.5%), Northeast (+5.5%), and Midwest (+5.1%). Versus a year ago, sales were down in all regions.

The median existing home price declined from $356,700 in August to $352,800 in September (not seasonally adjusted). That is a 13.3% increase from a year ago.

‘The Main Headwinds’

Based on current sales, there was 2.4 months of supply at the end of September, down 0.2 months from August. Analysts consider six months of inventory a rough balance between supply and demand.

"Rates have begun to rise, but too late to be captured in the September figures," added Long. "Demand is still outstripping supply, so it would take a large move in rates to dent sales.

"For now, low supply and elevated prices remain the main headwinds," concluded Long. "NAFCU expects sales to remain steady until supply bottlenecks are cleared."